China Supports High-quality Enterprises in Borrowing Foreign Debt

On July 23, 2024, the National Development and Reform Commission (NDRC) released the Circular of the National Development and Reform Commission on Supporting High-quality Enterprises in Borrowing Medium and Long-term Foreign Debt to Promote High-quality Development of the Real Economy (the “Circular”), which will come into effect on July 29, 2024.

The Circular said China supports high-quality enterprises that have significant industrial status, have good credit, and play a leading role in promoting high-quality development of the real economy in borrowing foreign debt, with priorities giving to those that meet five preset conditions. These conditions include that over the recent three years an enterprise (1) has not defaulted on a debt at home or abroad and is not in the condition of delaying the repayment of principal and interest continuously; (2) has no major violations and has not been blacklisted; (3) has not received an adverse opinion or a disclaimer of opinion from certified public accountants for financial statements, or has eliminated the impact involved in the qualified opinion if receiving one from certified public accountants. The Circular also noted that the NDRC will implement special reviews on the existing management basis for high-quality enterprises applying for foreign debt registration. The process will involve appropriate simplification of related requirements and acceleration of approval procedures.